Home Shopping, COMB In Merger Talks
NEW YORK (AP) _ The Home Shopping Network Inc., a televised shopping program pioneer, and C.O.M.B. Co., which specializes in buying close-out merchandise, said Tuesday they were talking about a merger.
A merger would apparently give Home Shopping an additional source of merchandise as it expands in the rapidly-growing video retailing business.
In a joint statement, the two companies said that ″preliminary discussions″ had been held to consider an exchange of stock.
The statement said that an agreement in principle had been ″structured″ for the exchange.
″Holders of C.O.M.B stock will receive $36 per share in HSN stock valued at the date of the closing,″ the statement said. ″Holders of the new HSN stock would also have a right to receive additional HSN shares for the difference between the market value of HSN and the basis upon which the exchange was calculated, if the market is lower on the first anniversary following closing of the transaction.″
The announcement did not say whether the two companies had agreed to those terms, or were using them as a basis for further negotiation.
It said that the proposed agreement in principle had not yet been presented to the boards of either company.
Judy Ludin, a spokeswoman for the Home Shopping Network, based in Clearwater, Fla., said she could answer no questions about the statement.
Two calls were placed to C.O.M.B., which is based in Plymouth, Minn. The first call was not returned, and the second went unanswered.
In trading on the American Stock Exchange, Home Shopping stock jumped $5.75 to $32.50 a share before the exchange halted trading late in the session pending the announcement. The stock split 2-for-1 on Tuesday.
In over-the-counter trading, C.O.M.B rose $4.50 to close at $28.25 a share.
Roy M. Speer, chairman of Home Shopping, said in the statement, ″This is an excellent opportunity to accentuate the great strengths of each company.″
Theodore Diekel, chairman of C.O.M.B., said the transaction would be considered by the C.O.M.B. board within two weeks.
The price of Home Shopping stock has risen sharply since the beginning of the year. The company said on Monday that it was discussing two possible acquisitions, but declined to elaborate.
Home Shopping launched a national shop-from-home program on cable television in the summer of 1985. Its programs are currently carried on cable and commercial broadcast outlets which can be seen by about 35 million households. Its programs feature hosts who demonstrate products and encourage viewers to place orders by telephone.
C.O.M.B. is a discount merchandiser which is a partner in another home shopping venture, the Cable Value Network, with 17 cable system operators.